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Which is the safest crypto wallet?

safe crypto wallet

January 27, 2021 | 

JOHN K MWANIKI |  0 Comments| 

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Cryptocurrencies are a risky investment. Not only are they highly volatile, but their investors are very susceptible to fraudsters and scammers. Like keeping your cash in a physical wallet, cryptos also have a digital wallet. A cryptocurrency wallet enables its users to record their coin transactions securely, away from hackers. These wallets can be either web-based or hardware-based, depending on your preferences.

There are many types of cryptocurrency wallets. But, which is the safest crypto wallet available for investors? This article looks at some secure crypto wallets and their advantages and disadvantages. We will also determine how you can find the safest crypto wallet to use.

How to find the safest crypto wallet

A cryptocurrency wallet is a premium online platform, hardware device, or software program that comes with a set of keys. These keys receive and send various cryptocurrency tokens to different blockchain addresses. The wallets store private and public keys, which are crucial when communicating with other cryptocurrency blockchain ledgers. 

Another feature of these wallets is that they allow users to view their cryptocurrency balances. You can see your transaction history, crypto balance, and current crypto holdings from the wallet. Unlike physical wallets, crypto wallets do not store your digital currency

The safest crypto wallet should not only be functional but also have the highest level of security available. The last thing you want is someone gaining unauthorized access to your keys and stealing your funds. Without further ado, let us look at some of the different types of crypto wallets.

Different types of cryptocurrency wallets

1. Hardware wallets

Also referred to as cold storage, these wallets are some of the safest crypto wallets. Hardware wallets are offline and have high in-built security. They allow users to store their keys in a USB-like device with advanced security measures. As a result, third-parties cannot access the keys without the right password. 

A hardware wallet works by connecting it to your PC and putting in the correct password. From there, you can start doing transactions. But, these devices are very costly compared to other wallets. Once corrupted, users cannot restore them, meaning the loss of their keys and funds.

A popular hardware wallet is the Ledger Nano S. With this device, you can transact with over 1,500 cryptocurrencies and store your private keys offline. Furthermore, users have to create a personal pin code and a 24-word recovery phrase if they lose their device or forget a pin. 

There is an improved version of this hardware wallet, known as Ledger Nano X. It offers its users extra functions for improved usability and comes with a bigger screen.

Another popular hardware wallet is the Trezor wallet, which is a secure and bullet-proof bitcoin wallet. It supports Linux, Mac, and Windows operating systems and offers two full-factor authentications. Other features include a password manager app and compatibility with ERC-20 tokens. The wallet also provides reliable cryptocurrency support for various cryptos. The device is easy to use and is compact that it can fit in the palm of your hand.

2. Software wallets

Also known as hot or online wallets, software wallets operate on internet-connected devices. In turn, they can be hacked from remote locations since they are online-based. These wallets are ideal for transacting small amounts of cryptocurrency. Thus, if you trade in low volumes, this is the safest crypto wallet for you. 

Coinbase is a reputable software wallet in the cryptocurrency industry. Popularly known as an exchange platform, its online wallet feature allows users to buy and sell crypto. You can also download it and use it offline. But, when buying and selling cryptocurrency, you have to use the Coinbase exchange platform, which charges transaction fees. Also, this wallet is available for Google Android and Apple iOS users.

Another convenient software crypto wallet is Exodus. With this sleekly-designed wallet, you can conduct multi-exchanges of Bitcoin, Litecoin, Ethereum, Dash, and Dogecoin. Users can also manage their keys securely. They can also view their investments and transactions in easy-to-read charts. The wallet is also customizable, meaning you can fine-tune it to fit your needs. 

3. Mobile-phone wallets

There are many app-based wallets available in the crypto industry. They are often designed for use in the retail sector for merchants who accept cryptocurrency payments. They are not the safest option but provide a convenient means of transacting with consumers.

Binance is one of the most popular exchange platforms. It offers its users a mobile-phone wallet known as Trust wallet. The wallet supports thousands of digital tokens and cryptocurrencies as it supports more than 40 blockchains. It is also decentralized and does not collect any personal information. The platform also hosts many card payment processors. This enables users to buy crypto without leaving the application.

4. Paper wallets

Paper wallets are one of the safest crypto wallets available. They are offline-based and function by printing QR codes that represent your private and public keys. As a result, users have complete authority over their crypto investments. 

These wallets are most suitable for people who prefer to store their money for a long time. Users can transfer money through their paper wallets using special software that intermediates between the receiver and sender. Websites like BitcoinPaperWallet.com gives users the option to print out paper wallets. The service offers long-term investment security by providing a tamper-proof offline paper wallet with full QR code access to its users.

But, it is the user's responsibility to store their paper wallets safely. Ensure your wallet is safe from any fire, environmental, or water damage to prevent losing all your funds. It is best to store a copy of your paper wallet with a trusted friend or family member. This ensures you have a backup of your private key in case of any damage or loss.

Conclusion

Cryptocurrency investors have access to different types of crypto wallets. So, it is up to you to choose the safest crypto wallet for your investment. As mentioned earlier, hardware and paper wallets are the safest crypto wallets for holding cryptos for the long term. But, mobile-phone and software wallets are convenient and easy-to-use for short-term traders. 

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